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Saturday, December 13, 2008

The essential truth: It's not americans who cannot get credit, it's the government that has none..irrespective of party

The day I heard Barack Obama tell Joe that he was going to take any potential fruit of his effort of mind and body in order to spread it around, so that everyone had a chance, and weighed that with Joe Biden smilingly affirming that taxes are patriotism, I picked up a book I haven't read since 1968, and began slowly to reread it.
atlasshrugged_glass_of_wine.jpg

You see, those words sounded familiar. This book, written in the early to mid 1950's is a chillingly ACCURATE predictor of today in both the minute word for word speeches we hear, and the granular detail of our situation.

Today we have a chorus of calumny made for the "common man" and "labor" by a left so dedicated to the idea that dialectic is truth that even their most fearful vision of what a neocon is, would be put to shame. Of course I speak of what is being said about the senators who prevented the government from another disaster this week by recognizing that we cannot save the present strutcture of the american auto industry.

IT IS NOT IN OUR POWER TO DO SO.

The reason we cannot even rationally attempt this effort is the same reason that Bush's "immigration" bill which promised secure borders along with a paroled amnesty process and some semi permanent immigration for temporary labor failed in a deluge of calls, telegrams, letters, and emails... we no longer believe the government would carry out their burden and their promise to us, and enforce secure borders.

Today we this get from the left this....
Harry Reid worked very hard -- indeed, he might have been willing to compromise too much -- to pull this together, but he noted last night, "By rejecting every good-faith bipartisan compromise -- including those from the White House and Senator Bob Corker -- it is now abundantly clear that Republicans have no interest in keeping the Big Three from collapsing.... Republicans may think that rejecting this legislation sent a message to the auto industry. Instead, they sent a message to every single American that they are more interested in settling scores than solving problems."
You see, we are supposed to believe that the UAW promise to get their benefits in line with those of workers at Toyota et al by 2011, will occur and that if it does not, the US govt will either enforce that or cut the auto industry off then.

Unfortunately the public simply does not believe the govt. or the unions. Crisis of confidence, the problem at the center of the economy.

New Republic:
Craven Senators Kill the Auto Deal

OK, let me get this straight. Tennessee Republican Senator Bob Corker, backed up by Alabama Senator Richard Shelby and South Carolina Senator Jim DeMint, made it a condition of the auto companies receiving help that the United Auto Workers agree to a reduction of wages and benefits to the level of those paid by the Japanese companies that have plants in those senators' states. Desperate for the deal, the UAW and the Democrats agreed to a phased-in reduction, but the Republicans insisted on an immediate cut. The deal broke down, and Republicans--aided by a few Red State Democrats (e.g. Baucus, Lincoln, Tester)--used a filibuster to kill the bill, which would have passed on a majority vote.

That is an utter distortion since Toyota actually pays in wages SLIGHTLY MORE than the $29.78 that the US automakers pay, but never mind. 56% of the labor cost at GM, etc are BENEFITS.Is anyone arguing that workers at Toyota have no health insurance, cannot go to the doctor, cannot have 401k's? 30% of their costs are benefits. Labor unions are demanding that this structure be maintained or THEY will disappear, not american manufacturing.

Of course, this is not just about automobile companies. If you look at the history of the Great Depression, what tipped that event from a global recession to depression was precisely a series of dumb, craven--or in Keynes' word, "feather-brained"--moves by politicians blinded by ideology or by narrow self-interest. An interest rate hike here, a balanced budget there, a spending reduction or two, and we went from ten to twenty percent unemployment. Don't imagine for a moment that the failure to bailout the auto companies isn't one of those feather-brained moves.

In that case the first wrong move was to allow labor unions to impose this structure on an entire industry, NOT RESISTING HAVING US ALL PAY BLACKMAIL TO UNION BOSSES.

Put it this way. What we have learned from the economics of the Great Depression is that in order to end the spiral of unemployment, government has to throw money at companies and consumers. It should be trying to raise wages, not lower them.

The first distortion again. Foreign employers PAY MORE DIRECTLY TO THE WORKERS. They do NOT pay unions off.

The Wall Street bailout was a fiasco, but it was probably better than nothing. And the auto bailout was considerably better thought-out. Now there is a good prospect that two of the Big Three will fail, jeopardizing, perhaps, as many as a million jobs. That's exactly the kind of thing that Americans should not be doing. But don't tell that to those great patriots Corker, DeMint, or Shelby. They know better.


From AP:

Hourly wages for UAW workers at GM factories are about equal to those paid by Toyota Motor Corp. (TM) at its older U.S. factories, according to the companies. GM says the average UAW laborer makes $29.78 per hour, while Toyota says it pays about $30 per hour. But the unionized factories have far higher benefit costs.

GM says its total hourly labor costs are now $69, including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.



Perhaps in order to justify these unions all americans should simply agree to pay a surcharge whenever a new american vehicle is purchased in order to pay for the retiree benefits (such as health insurance for those retired younger than Medicare age) of union members. Think we'd sell a SINGLE AMERICAN CAR if the surcharge amount were shown as a line item on every vehicle's window sticker?

The fault here lies with the industry.
Management
Labor Management
Workers who voted for labor management which would greedily equal the rapacious stupidity of corporate management paying themselves more than COULD EVER be borne by americans who would eventually pay for cars and trucks.
It is not in the power of those same americans to save that industry now.
To try to do so will only make it all worse.
CHAPTER 11.

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2 Comments:

Blogger christian soldier said...

I - too- have a section in my library for the writings of Ayn Rand -they are for today!
I must confess-I just read 1984-Orwell...
Just as our Founders knew that "absolute power corrupts absolutely"-we must take from history and ACT..
Thank you for an excellent post.

Saturday, December 13, 2008 5:41:00 pm  
Anonymous ciccio said...

The British government supported its auto industry and their unions to the hilt. The German government left them to their own devices, a few fell by the wayside but most increased research, productivity, cut costs and prospered. There is no more British auto industry. The German auto industry made more profit last year than the bail-out the US industry now wants.

Sunday, December 14, 2008 4:57:00 am  

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